Following three years of recession and in the midst of a serious economic and financial crisis, economic activity dropped sharply. In 2002, gross domestic product (GDP) fell by 12% and was 17% lower than the maximum reached in 1998, thereby pulling per capita GDP back down to its 1991 level. Such a dramatic decrease resulted in an unemployment rate of 17% of the economically active population, while inflation, after several years of low figures, rose to an annual rate of around 26%. Despite the reduction in real expenditure, the loss of income resulting from the recession thwarted the authorities’ efforts to reduce the public-sector deficit to less than 4% of GDP. Meanwhile a steep downturn in imports, owing to a sharp fall in domestic demand, helped to narrow the trade gap.

Related Subject(s): Economic and Social Development
Countries: Uruguay
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